Originally Posted by
bassjones
same holds true for guitar shops. the real profit margins are in strings, straps, cords, etc... The markup on guitars is around 30%, but a $2000 guitar may sit on the shelf for months or even a couple of years before somebody buys it. A high volume dealer like Guitar Center (Performance Bike equivalent) may get a bit better pricing from the OEM and they also may sometimes take a loss on something to get it out the door.
Don't know if bikes work the same way, but essentially most guitar shops are buying their guitars from the OEM on loan. The longer it sits on their shelves the less profit they make on it. They're also usually required to order a certain number of instruments in each price range. They sell a lot more of and make a lot better profit selling $500 guitars than they do the $2000 guitars, but they are required to stock a certain number of the high end models.
Funny how thing works the opposite if you are selling high end watch. Before the current economy, for a rolex authorized dealer to have a full display of daytona(13k to 20k+) you would have to sell a whole lot of "standard" rolex(subs?), for some smaller shop you would almost guarantee not to see more than a couple style of daytona, if they lucky enough to get one(bracket, 18k gold, Stainless, leather, strap, etc).
a well known local bike shop is selling Caad9 2010 with 105 for around $1,200 when i was visiting for small part today, if i am shopping for a new bike, i probably opts for the 2011 Caad10 for a hair more(manufacturing origin aside)